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The module presents the main sources of funding available in real estate markets, presenting the implication on returns, ownership and cash flows.

Aims:

The module will present and analyse several sources of funding and their pricing. The process of raising equity for listed companies and unlisted funds will be introduced and examined. As far as debt funding is concerned, alongside traditional methods (e.g. private lending and mortgages), the course will also cover structured products and hybrid forms of financing. Particular emphasis will be given to the implications of different debt structures on returns achieved/achievable by equity investors.

Assessable learning outcomes:

The module aims to provide students with the core knowledge required to appreciate the unique characteristics of financing decisions in the context of commercial real estate. After the module completion, students will be able to:

- Apply finance theory to the funding decision process

- Be familiar with the different sources of funding available for real estate investments

- Critically analyse the structure and pricing of each funding opportunity

- Embed the funding choice within an investment decision process.

- Construct financing cash flows to enrich valuation models.

- Be able to analyse the return implications of funding choices for equity investors

Additional outcomes:

Students will develop an overall awareness of the financing decision making process. Cash flow modelling of project appraisal with different funding structures will enhance students’ analytical skills.

Outline content:

Project vs company financing

Analysis of sources of real estate finance such as:

- Private lending and mortgages

- Structured finance

- Capital market products

- Hybrid finance

Implication of each source for returns to equity investors

Brief description of teaching and learning methods:

The course will be delivered as a block release with on-line post course support. The block release teaching will comprise lectures, seminars and problem solving workshops, with an individual assignment acting as a consolidating and integrating vehicle for the taught material. After the block release taught element, the learning process will be supported by the use of Blackboard. The course information, handouts, presentations and assignment will be supplemented by the use of discussion between students on technical aspects of the assignment and other material.

Contact hours:

Autumn

Spring

Summer

Lectures

20

Seminars

10

Guided independent study

170

Total hours by term

200.00

Total hours for module

200.00

Summative Assessment Methods:

Method

Percentage

Written assignment including essay

100.00

Other information on summative assessment:

The assessment will be based on a report where the student will usually apply several aspects of the course related to the funding decision process. This will involve analytic and quantitative work, a guide of 5000 words is suggested.

As this is a core Module of Special Significance, students joining the MSc Real Estate Investment & Finance programme from September 2017 will have to achieve a mark of at least 40 in order to be awarded the MSc.

Formative assessment methods:

Informal feedback is accessible via seminars/tutorials during the teaching block week where key theoretical and empirical concepts are applied and tested. Communication via email and blackboard is also a useful learning tool during the period after the teaching week.

Penalties for late submission:Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information: http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx

Length of examination:

No exam for this module

Requirements for a pass:

50%

Reassessment arrangements:

Reassessment will be by the same method as for the module's original assessment requirements, subject to variation by the Examination Board where appropriate.